Understanding the Conversion of Disability Benefits at Full Retirement Age
For individuals on Social Security Disability Insurance (SSDI), reaching full retirement age triggers a crucial change in their benefits. The Social Security Administration (SSA) automatically converts your SSDI payments into Social Security retirement benefits. For most people today, full retirement age is no longer 65, but rather 67 if you were born in 1960 or later. This is not a cessation of benefits, but rather a reclassification of the payment.
For example, a person born in 1960 who is receiving SSDI would see their benefit status change from disability to retirement at age 67. The monthly payment amount remains the same, adjusted only for cost-of-living increases, and continues without interruption. There is no action required on your part for this change to occur.
Can You Apply for Disability at Age 65?
For individuals who are not already on disability benefits, applying for SSDI at or after age 65 has a key distinction. The rules for SSDI state that applicants must be below their full retirement age. Therefore, once you reach full retirement age (which is 66 or 67 for most people, not 65), you can no longer apply for or receive SSDI payments. Instead, you must apply for Social Security retirement benefits.
However, there are certain situations where applying for disability in the months leading up to your full retirement age might be beneficial. If you are eligible for a higher amount through SSDI than what you would receive by taking early retirement at age 62, the SSDI claim could eventually result in a higher monthly payment.
Supplemental Security Income (SSI) rules for seniors
Unlike SSDI, the rules for Supplemental Security Income (SSI) are based on financial need, not work history. The program is available to people who are disabled, blind, or age 65 or older and have very limited income and resources. For those receiving SSI, there is no automatic conversion at full retirement age, and they can continue to receive SSI benefits as long as they meet the financial eligibility requirements. In fact, it is possible for some individuals to receive both a Social Security retirement benefit and an SSI payment at the same time, if their retirement income is low enough to meet the SSI income limits.
Options for Claiming Benefits Around Age 65
When approaching retirement, a disability can complicate the decision of when and how to claim benefits. Here is a comparison of different scenarios:
| Scenario | Eligibility at Age 65 (Born 1960 or Later) | Key Outcome |
|---|---|---|
| Currently on SSDI | Automatically switches to retirement benefits at age 67. | Payments continue uninterrupted and at the same amount, but are reclassified. |
| Applying for first time with disability | Cannot apply for SSDI after full retirement age (67). | Must file for regular Social Security retirement benefits instead. |
| Currently on Early Retirement (Age 62) | May be able to apply for SSDI if disability occurred before claiming. | Could have benefits adjusted up to the full retirement amount plus back pay, then convert to retirement at age 67. |
| Low income with no work history | Can apply for Supplemental Security Income (SSI). | Payments depend on meeting income and asset limits, not work history. |
Important Considerations
Navigating Social Security benefits can be complex, and making the right decision is critical for financial security. If you are approaching retirement age and have a disabling condition, it is wise to evaluate your options carefully.
- Consider filing for SSDI first: If you are under your full retirement age and have a severe disability, filing for SSDI can secure you a higher monthly payment, equivalent to your full retirement amount. This is generally a better option than taking a reduced early retirement benefit.
- Understand the “dual entitlement” scenario: While you can't get two full checks for the same earnings record, you can receive both SSI and a low Social Security retirement benefit if your income is limited. The SSI amount would be adjusted to account for the other benefit.
- Impact on family benefits: The rules can affect your spouse or dependent children. When SSDI benefits convert to retirement benefits, the family maximum benefit calculation can change, potentially altering the amount your dependents receive.
Conclusion
In summary, you cannot simultaneously receive both Social Security Disability and Social Security retirement benefits on your own earnings record. For those already on disability, the SSDI payments seamlessly convert to retirement benefits at their full retirement age, which is no longer 65 for most people today. For those applying for the first time at age 65, the option depends on your birth year. If 65 is your full retirement age, you would simply apply for retirement benefits; if it is before your full retirement age, you could potentially apply for SSDI. However, individuals with limited income and resources may also be eligible for the Supplemental Security Income (SSI) program, which can be received concurrently with a small retirement benefit. Consulting with the SSA or a financial advisor can help clarify the best strategy for your specific circumstances.
Important Resources
Need help? Talk to an expert
If you have a complex situation, such as having already claimed early retirement or a limited work history, consulting with an experienced benefits counselor or legal professional is recommended. The SSA website also offers a Benefits Eligibility Screening Tool (BEST) to help determine if you qualify for various programs.
This article provides general information and is not legal or financial advice. Consult with a qualified professional for personalized guidance.
